Impact of Medicare's Prospective Payment System on Hospitals, Skilled Nursing Facilities, and Home Health Agencies

2006 ◽  
Vol 25 (3) ◽  
pp. 198-205
Author(s):  
Robert R. Kulesher
Author(s):  
Chapin White

In 1998, Medicare began phasing in a new prospective payment system (PPS) for skilled nursing facilities (SNFs). This paper measures facility-level changes in nurse staffing and quality at freestanding SNFs from 1997 (pre-PPS) to 2001 (post-PPS). Findings show a positive but small association between changes in payment levels and changes in nurse staffing. Among for-profits, the elimination of cost reimbursement is associated with a large drop in nurse staffing. Additionally, the elimination of cost reimbursement is associated with worsening in one of four measures of quality of care; however, the quality results are not statistically robust.


2016 ◽  
Vol 29 (2) ◽  
pp. 81-90 ◽  
Author(s):  
Betty Fout ◽  
Michael Plotzke ◽  
Thomas Christian

A criticism of Medicare’s home health prospective payment system is its partial reliance on cost-based reimbursement of therapy services provided by home health agencies (HHAs) to Medicare fee-for-service (FFS) beneficiaries, potentially overincentivizing the provision of therapy services. Using Medicare FFS home health claims and assessment data, we estimated a model to predict therapy use as a proxy for clinical need and replace actual therapy use with the prediction in the home health payment system. We estimated a $1.178 billion (95% confidence interval, $1.171-$1.184) decrease in home health payments relative to levels under the current system. The majority of the decrease was due to the model predicting fewer high therapy episodes than actually occurred. It may therefore be more appropriate to predict both therapy and nontherapy use, requiring an overhaul of the current system.


Author(s):  
Korbin Liu ◽  
Kirsten J. Black

Differential Medicare payments for hospital-based and freestanding skilled nursing facilities (SNFs) were eliminated by the SNF prospective payment system initiated in 1998. Closures and high negative margins of hospital-based facilities have prompted consideration of the need to revisit payment adjustments for this group of SNFs. We examine case mix-related and other factors behind the cost differences between hospital-based and freestanding SNFs. Some payment adjustment, notably for nontherapy ancillary services, may be reasonable for the short term.


Author(s):  
Roy Rada

The official definition of a healthcare provider is broad. It encompasses institutional providers such as hospitals, nursing facilities, home health agencies, outpatient facilities, clinical laboratories, various licensed healthcare practitioners, and durable medical equipment suppliers. Any individual or organization that is paid to provide healthcare services is a healthcare provider.


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